Brazil's telecoms regulator Anatel rejected plans of Oi, formerly Telemar, to acquire Minas Gerais state-based cable TV company Way Brasil, Oi confirmed in a statement.
According to a decision taken at Anatel's weekly board meeting, Brazil's largest fixed line operator Oi would breach its fixed line telecoms concession contract if it offered cable TV services in its own region.
By acquiring Way TV, Oi aimed to secure a cable TV license as part of its plan to compete in the triple play services market.
The decision does not have a major impact on the company's current financial results, as cable is still a small part of its business, André Roche, a telecoms analyst with local brokerage Unibanco Corretora, told BNamericas.
"But it has an impact on its [Oi's] future strategy," he warned.
"The operator may ask Anatel to review its decision or go to court to reverse the decision," he predicted.
Nonetheless, the Anatel ruling is in line with existing telecoms law, which does not allow telecoms operators to offer cable TV in their own regions, Roche said, describing the law as being somewhat out of date in the fast changing convergent environment.
An Oi spokesperson did not want to comment on the decision or the operator's next step.
However, on March 9 Oi's regulatory affairs director Alain Rivière told analysts during an earnings conference call that if Anatel rejected the acquisition of Way TV, the company planned to offer triple play through a partnership with a cable TV provider.
"We have a plan A, which is to have a cable TV license, while plan B will be to offer triple play via satellite and radio... This can be done via a partnership or through our own license as Telefónica has done," Rivière said."
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